If you sell Medicare supplements, you may have heard that Medigap plans C and F are being eliminated in 2020. Since that’s just over a year away, and because Medigap Plan F is the most popular Medicare supplement plan, you’ll probably start getting some questions from your Medicare-eligible (and near-eligible) clients. Here are a few short-and-sweet answers to some of the more common questions.

What’s happening?

Medicare Supplement Plans C and F are being eliminated starting in 2020 for people newly eligible for Medicare.

Why are Medigap Plans C and F being phased out?

This change was included in a 2015 bill that increased the payment amounts for physicians who treat Medicare recipients. To help offset the cost, the government wanted to discourage utilization, so the decision was made to phase out the two Medigap plans that cover the annual Part B deductible, which is currently $183. By eliminating this “first dollar” coverage, Congress believed people would be less likely to seek medical care for minor illnesses or injuries.

Who does this change affect?

This change only affects people newly eligible for Medicare on or after January 1, 2020. This means that:

  • If you already have a Plan C or Plan F supplement, you can keep it.
  • If you are already eligible for Medicare before 2020, you will still have the option to purchase a Plan C or Plan F supplement in 2020 and beyond. Of course, if you are not in your Medigap open enrollment period (the first six months after you sign up for Part B), you may have to answer medical questions and the policy will not be guarantee issue.

What if I was eligible for Medicare before 2020 but delayed Part B because I was still working?

Good news! You will still have the option of purchasing a Medicare Plan C or F supplement after you retire or lose your group health coverage, even if that is after 2020.

Should Medicare beneficiaries hurry and buy a Plan F before it is eliminated?

Not necessarily. As already mentioned, people who are eligible for Medicare Plan F before 2020 will still have the opportunity to purchase a Plan F supplement going forward if they qualify, so there’s no rush. Of course, if you’re in your six-month Medigap open enrollment period, then you may want to select a Plan F if you feel that plan is right for you.

Will any new plans be added to take the place of Plans C and F?

No, Medigap Plans C and F are being phased out, but no new plans are being introduced. So, instead of 10 standardized Medicare supplement plans (or 11 if you select the High Deductible plan F), there will be only eight for new Medicare recipients starting in 2020, while those who already have Medicare will continue to have the same options.

What else should I know about the 2020 changes?

Currently, Medigap plan F is the most popular Medicare supplement, so for new Medicare recipients starting in 2020, Medigap plan G is likely to take its place as the most popular plan. Medicare supplement plan G fills the same holes as plan F with the exception of the Part B deductible.

Also, new, younger enrollees will no longer be added to the risk pool for Medigap plan F starting in 2020, so it is possible that we will see the rates for that plan increase more rapidly in the future. Medicare recipients who are worried about this possibility may want to consider switching to Medigap plan G earlier than 2020. Remember, if a beneficiary on plan F develops a medical condition, he or she may not be able to switch to plan G later on.